Working from home has become the norm for many business owners, freelancers and company directors.

Whether you have a dedicated home office or simply work from the kitchen table, you may have wondered:

“Can my limited company pay me for working from home?”

The answer is yes, but the amount your company can pay, and how it is paid, depends on your circumstances.

Many directors either claim nothing at all or assume they can claim a large proportion of their household bills. In reality, there are several ways to deal with home working costs, each with its own tax implications.

Understanding the rules can help ensure you’re claiming what you’re entitled to without creating unnecessary tax issues.

The short answer

If you work from home for your limited company, the company may be able to contribute towards certain home-working costs.

Depending on your circumstances, this could include:

• A home working allowance.
• Reimbursement of certain business expenses.
• A formal rental or licence arrangement in limited situations.
• Business equipment purchased by the company.

The most suitable method depends on how you work and how your company is structured.

Can my company pay me for working from home?

Yes.

If you regularly work from home, your company may be able to contribute towards some of the additional costs of using your home for business.

However, this doesn’t mean the company can simply pay your mortgage or all of your household bills.

Only genuine business-related costs should be considered.

What home-working costs might be relevant?

Working from home may increase costs such as:

• Electricity.
• Heating.
• Broadband.
• Water (in some circumstances).
• Office equipment.
• Printing.
• Stationery.
• Business telephone costs.

The appropriate method of claiming depends on the nature of the expense.

Can the company buy office equipment?

Yes.

Your limited company can usually purchase equipment needed for business, including:

• Computers.
• Monitors.
• Office desks.
• Office chairs.
• Keyboards.
• Printers.
• Webcams.
• Business software.

Keeping invoices and purchase records is important.

What about broadband?

If broadband is used for both business and personal purposes, the position can become more complex.

Where broadband already exists for personal use, simply paying the household bill through the company may not always produce the desired tax result.

Each situation should be considered individually.

Can I claim part of my electricity bill?

Possibly.

Where working from home increases household running costs, there may be ways for the company to contribute towards those additional expenses.

The method chosen should be supported by appropriate records where required.

Can my company pay part of my mortgage?

Generally, no.

Mortgage repayments are personal costs and are not normally transformed into business expenses simply because you work from home.

This is one of the biggest misconceptions among company directors.

Should I charge rent to my company?

Some directors consider charging rent for using part of their home.

While this may be appropriate in some situations, it can create additional tax considerations and should be reviewed carefully before proceeding.

The overall tax position should always be considered rather than focusing only on one deduction.

Keep good records

If your company contributes towards home-working costs, keep records such as:

• Utility bills.
• Broadband invoices.
• Equipment invoices.
• Business purchase receipts.
• Home office records.
• Company payment records.

Good documentation makes bookkeeping and tax reporting much simpler.

Common mistakes

Business owners often:

• Claim personal household costs.
• Put mortgage payments through the company.
• Forget to keep invoices.
• Mix personal and business purchases.
• Buy equipment without proper records.
• Assume every home expense is tax deductible.

These mistakes can create unnecessary complications if questioned.

Frequently Asked Questions

Can my limited company pay me for working from home?

Yes, provided the payments are made using an appropriate method and relate to genuine business use.

Can I claim my mortgage?

Generally, mortgage repayments remain personal expenses.

Can my company buy office equipment?

Yes, where the equipment is required for business purposes.

Can I claim broadband?

Depending on the circumstances, some business-related broadband costs may be claimable.

Should I keep receipts?

Yes. Keeping good records supports your bookkeeping and tax position.

Final thoughts

Working from home can create legitimate business costs, but it’s important to claim them correctly.

Choosing the right method can help you recover genuine business expenses while avoiding unnecessary tax complications.

Before putting household bills through your company, it’s worth understanding the available options and the wider tax consequences.

At Merranti Accounting, we help directors understand the most appropriate way to claim home-working costs, ensuring expenses are recorded correctly and in line with HMRC guidance.

Written by Steve Watts